Bombay High Court
Rajendra Manohar Kowli And Anr vs Bank Of India on 6 May, 2022
Bench: Makarand Subhash Karnik
1
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IN THE HIGH COURT OF JUDICATURE AT BOMBAY
Digitally
CIVIL APPELLATE JURISDICTION
signed by
URMILA
URMILA PRAMOD
CIVIL WRIT PETITION NO.1629 OF 2020
PRAMOD INGALE
INGALE Date:
2022.05.07
13:55:12
+0530
1] Rajendra Manohar Kowli,
Age 52 years, Occu. Architect,
R/at : 24, Dayan Sagar, S.K. Bole
Road, Dadar, Mumbai - 400 028.
2) Manohar Bhaskar Kowli,
(Since Deceased through Legal
Representatives)
2(a) Ms. Rekha Manohar Kowli
(Daughter)(Since Deceased)
2(b) Ms. Sandhya Manohar Kowli
(Daughter)
Age : 40 years, Occ. : Business,
Both of them R/at : 24, Dnyan Sagar,
S.K. Bole Road, Dadar,
Mumbai - 400 028. ... Petitioners
-- Versus -
Bank of India,
Banking Company Incorporated under the
Banking Companies (Acquisition and
Transfer of Undertakings) Act, 1970, having
its Head Office at Express Towers,
Nariman Point, Mumbai-21
And a Branch amongst others at
Dadar (W), Mumbai. ... Respondents
=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=
Mr. Sudhir V. Somalwar, Advocate for the Petitioners.
Mr. O.A. Das, Advocate for the Respondent.
=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=
2
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CORAM : DIPANKAR DATTA, CJ &
M.S. KARNIK, J.
RESERVED ON : 14/12/2021
PRONOUNCED ON : 06/05/2022
JUDGMENT : (Per M.S. Karnik, J.)
1) The petitioners invoke the jurisdiction of this Court under
Article 226 and 227 of the Constitution of India challenging an
order dated 26/12/2019 passed by the Debts Recovery Appellate
Tribunal ('DRAT' for short) in Appeal No.153/2005. The appeal
before the DRAT arose from an order passed by the Debts
Recovery Tribunal No.II, Mumbai ('DRT' for short), which came to
be challenged by the petitioners before the DRAT, Mumbai. The
petitioners, inter alia, pray for the following reliefs:
(a) That, this Hon'ble Court be pleased to issue a
Writ of Certiorari or any other Writ in the nature of
Certiorari calling for the records and proceedings of
the Order dated 26/12/2019 passed by DRAT in
Appeal No.153 of 2005, this Hon'ble Court be pleased
to quash and set aside in impugned Order/Judgment
dated 26/12/2019.
(b) Quashed and set aside the order passed by DRT-II,
Mumbai. Respondents pay compensation of
₹50,00,00,000/- (Rupees Fifty Crores Only) to
Petitioner along with interest rate at 18% p.a.
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2] The fact of the case in brief are as under :
(A) On a request made by the petitioners vide their letter
dated 12/07/1994, the respondent-Bank of India
(hereafter 'Bank' for short) paid a sum of
₹27,00,000/- to the beneficiary of the bank guarantee
and later after making adjustment of the deposits
belonging to the petitioners lying with the Bank, a
sum of ₹7,00,000/-was found to be payable by the
petitioners to the Bank. On 19/07/1994, the
documents being Demand Promissory Note, Letter of
Lien and Set Off, Letter of Continuity of Security were
obtained from the petitioners. As the petitioners
failed to pay the outstanding amount, the Bank issued
a notice and thereafter filed a suit bearing
No.3272/1997 against the petitioners in this Court for
recovery. The said suit was subsequently transferred
to the DRT upon its establishment as per the
provisions of The Recovery of Debts Due to Banks and
Financial Institutions Act, 1993 (hereafter 'RDDB Act'
for short).
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(B) During the pendency of the suit, original defendant
No.1 expired, whereupon his legal representatives are
brought on record as defendant No.1(a) and
defendant No.1(b) [present petitioner Nos.2(a) and
2(b)]in the said suit. Petitioner No.1 (original
defendant No.2) filed written statement which came to
be adopted by petitioner Nos.2(a) and 2(b) disputing
the claim of the Bank.
(C) It is the case of the petitioners that the bank
guarantee was originally obtained from the United
Western Bank on a commission of 0.5% on the
guarantee amount. The Official of the Bank of India
approached the petitioners with an offer that they
propose to charge less than 0.5% commission on the
guarantee amount. The petitioners thereupon shifted
all the fixed deposits from United Western Bank to the
Bank. The bank guarantee for ₹27,00,000/- is
obtained from the Bank, but contrary to the promise,
the Bank charged commission at 1%. The petitioners
disputed such charge which was contrary to the
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promise made, by exchanging correspondence. The
claim of the Bank, according to the petitioners, is not
tenable. The petitioners gave a number of Fixed
Deposit Receipts (hereafter 'FDR' for short) to the
Bank in joint names as security. According to the
Petitioners calculations, the interest accrued on these
FDRs is to the tune of ₹10,00,000/- which is much
more than the amount of ₹7,00,000/- outstanding
claimed by the Bank. It is the petitioners' case that
the Bank has not properly maintained the accounts
and in fact it is the Bank which has misappropriated
the monies of the petitioners.
(D) Upon transfer of Bank's suit to the DRT, rival claims of
the parties came to be considered by the Tribunal. The
DRT allowed the Original Application (hereafter 'OA'
for short) filed by the Bank for recovery. DRT granted
contractual rate of interest from the date of OA and
thereafter at 12% p.a. with quarterly rests till
realization. The petitioners filed an appeal before the
DRAT under the provisions of the RDDB Act. The
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DRAT by its order dated 26/12/2019, which is
impugned in this petition, dismissed the appeal with
costs.
3] Submissions of the learned Counsel for the
petitioners :
(A) Learned Counsel for the petitioners submitted that the
bank guarantee for ₹27,00,000/- was issued on
21/04/1989 against the FDR of (a) ₹20,00,000; (b)
₹20,000/- and (c) ₹70,000/- aggregating to
₹20,90,000/- in the name of Mr. Manohar B. Kowli.
Every year the bank guarantee was renewed. The last
renewal of the bank guarantee was on 20/04/1994.
The FDR of ₹20,00,000/- was lying with the Bank
since 21/04/1989 with agreed rate of 9% cumulative
interest. No statement of account of interest was
given by the Bank despite repeated requests. As per
the Chartered Accountant's Certificate, accrued
interest on the FDR of ₹20,00,000/- for the period
21/04/1989 to 20/07/1994 at 9% cumulative rate of
interest works out to ₹14,11,533.15. As on
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20/07/1994 when the bank guarantee was paid by the
Bank to the beneficiary, the Bank was holding FDR of
₹20,90,000/- plus accrued interest of ₹14,11,533.15
aggregating to more than ₹35,00,000/-. According to
the Petitioners, there was surplus of ₹7,00,000/- lying
with the Bank after paying bank guarantee of
₹27,00,000/-. The Bank has fraudulently debited
commission on the bank guarantee at the rate of 1%
and 2%. Instead of giving the statement of account
of interest on FDR, the suit is filed for recovery. The
petitioners realized that they were cheated when the
letter dated 30/03/1993 informing them of the
commission recovered on bank guarantee was given
to them. The petitioners repeatedly asked the bank to
give statement of accounts of the interest on FDRs
and also commission deducted, which the bank
avoided. The Bank has cheated the petitioners and
obtained signatures of the petitioners on blank papers.
No documents were renewed during the period 1989
to 1994. The petitioners have not signed any
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document after the payment of the bank guarantee in
the year 1994.
(B) It is further submitted that when the United Western
Bank had already issued bank guarantee of
₹27,00,000/- charging commission at the rate 0.5%
p.a. against the FDR of ₹20,00,000/-, there was no
occasion for the petitioners to obtain the bank
guarantee from the Bank by agreeing to pay higher
commission charges. It does not appeal to logic that
the Petitioners would agree to pay commission of 1%
and 2% to the Bank when the commission that was
being paid by the petitioners to the United Western
Bank was 0.5%. It is obvious that the petitioners are
cheated and necessary inference must be drawn that
though the Bank agreed to charge commission less
than 0.5 %, the signatures of the Petitioners were
obtained by the Bank on blank papers with a view to
cheat them.
(C) The learned Counsel reiterated that the Bank has not
taken into consideration the interest accrued on FDR
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of ₹20,90,000/- from 1989 to 1994, which amounts to
₹15,65,052/-. It is, therefore, submitted that the
petitioners did not owe any money to the Bank after
taking into consideration the interest accrued on FDR.
The learned Counsel strenuously urged that it is the
Bank which owes to the petitioners surplus amount of
₹9,55,052/- lying with it since 1994 along with
interest at the rate of 21% p.a. till realization of the
said amount.
4] Submissions of the learned Counsel for the
respondent :
Learned Counsel for the Bank on the other hand
submitted that the petitioners are assailing findings of fact
rendered by the Tribunals. Our attention is invited to the findings
recorded by the DRT and DRAT. It is submitted that the findings
are based on the appreciation of the evidence on record. Arguing
in support of the findings, learned Counsel submitted that the
findings cannot be said to be perverse. He prayed for dismissal
of the petition.
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5] After conclusion of the hearing, the petitioners also
filed additional documents on 17/12/2021. In the interest of
justice, we have taken the same on record. We have taken into
consideration the additional documents, which are in the form of
affidavit-in-reply dated 07/01/2005 filed before the DRT in
response to the affidavit of Ms.Smita Sabnis. Reliance is also
placed on the affidavit dated 03/03/2008 filed by petitioner No.1
before the DRAT.
6] We have gone through the memo of the petition. We
have perused the copy of the petition and exhibits, the pleadings
filed by the parties. With the able assistance of the learned
Counsel for the parties, we have gone through the findings of the
DRT and DRAT. The petitioners want us to draw certain
inferences from the pleaded facts and the documents on record.
The petitioners also want us to draw an inference by contending
that when the bank guarantee was originally given by the United
Western Bank on a commission at 0.5% on the guarantee
amount, there was no reason for the petitioners to have accepted
the proposal of the Bank at a higher rate of commission. The
petitioners also want us to infer that it is obvious that it is the
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Bank which had approached the petitioners with a proposal to
charge less than 0.5% commission on the guarantee amount.
The Petitioners are persuading us to hold that it is for this reason
that the FDR and deposits which were lying with the United
Western Bank came to be shifted to the Bank.
7] We have gone through the records. To support the
contention of the petitioners that the bank agreed to charge a
commission of less than 0.5% on the guarantee amount while
obtaining the Bank guarantee, there is absolutely no material on
record. Though there are letters written by deceased Manohar
Kowli to the Bank placed on record, but these letters are much
later in point of time from the date of obtaining the bank
guarantee. These letters placed on record by way of additional
compilation are from the year 1996 onwards. The bank
guarantee was obtained prior to 20/04/1989. The bank
guarantee was renewed from time to time and the last renewal
was on 20/04/1994. At the request of the petitioners, the Bank
on 21/04/1989 had given bank guarantee of ₹27,00,000/-
favouring M/s. Markand Gandhi & Company, Advocates &
Solicitors, for a sum of ₹27,00,000/- and in consideration
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thereof, deceased Manohar Kowli (predecessor of defendant
No.2) executed a letter of counter guarantee and indemnity
dated 20/04/1989. The bank guarantee was renewed from time
to time and the last of renewal was made on 20/04/1994. The
petitioners had three FDR amounting to ₹20,90,000/- with the
Bank bearing FDR Nos.28/2, 29/334 and 28/920 at the time of
giving of the bank guarantee. It is not denied that the
petitioners had given letter dated 21/04/1989 addressed to the
Sub-Registrar of Assurance, Mumbai requesting him to directly
deliver the title documents to the Bank. The case of the
petitioners is that deceased Manohar Kowli signed the documents
on blank papers. It is pertinent to note that though the bank
guarantee is dated 21/04/1989, there was no grievance made as
to obtaining of the signatures by the Bank of the petitioners on
blank papers. On the contrary, the commission was being paid on
the guarantee. When the Bank paid the amount to the
beneficiary on 19/07/1994, the documents like Demand
Promissory Note, Letter of Lien and Set Off, Letter of Continuity
of Security were obtained from the Petitioners for the balance
amount after adjusting the money belonging to the petitioners
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that was lying with the Bank.
8] The letter dated 12/07/1994 addressed by the
petitioners to the Bank clearly reveals that the petitioners had
called upon the Bank to make a payment of sum of ₹27,00,000/-
to the beneficiary. The Bank had thereafter made payment of
sum of ₹27,00,000/- to the beneficiary by letter dated
19/07/1994. After making the payment of ₹27,00,000/-, the
Bank adjusted the margin money aggregating to ₹20,00,000/-
lying with the Bank in the name of the petitioners by way of FDR.
A sum of ₹7,00,000/- was found due and payable by the
petitioners to the Bank.
9] In consideration of the Bank granting/continuing to
grant to the petitioners a sum of ₹7,00,000/-, deceased Manohar
Kowli on 19/07/1994 executed the Demand Promissory Note for
₹7,00,000/- payable with interest thereon at 18.28% p.a. with
quarterly rests.
10] Though the petitioners contended that the Bank
allegedly charged excess commission charges, the said objection
is raised at a very belated stage, almost 10 years after the Bank
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started recovering the commission charges. From 1989 onwards,
the commission charges as demanded by the Bank were in fact
paid by the petitioners for sometime. It is only when the
outstanding amount increased and the question of recovery
arose, that a claim is made about the excess commission
charges. In fact it is the case of the petitioners themselves that
the outstanding which the petitioners owe to the Bank be
adjusted from the interest accrued on the FDR lying with the
Bank. The case of the petitioners therefore is mainly that the
Bank has not maintained proper accounts and failed to calculate
the proper interest on the FDRs.
11] Thus, the conduct of the petitioners after the Bank
paid a sum of ₹27,00,000/- to the beneficiary of the bank
guarantee by letter dated 12/07/1994 assumes importance.
Pursuant to this payment by the Bank, several documents were
executed by the petitioners on 19/07/1994 securing the amount
of ₹7,00,000/- found due and payable by them. The case of the
petitioners that the signatures were obtained on blank papers
can only be stated to be rejected. At the cost of repetition, the
petitioners contended that there were number of fixed deposits
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lying with the Bank and as the accrued interest thereon would be
₹10,00,000/-, the amount of ₹7,00,000/- claimed as due and
payable ought to have been adjusted. We do not find any merit in
the contention of the petitioners as regards charging excessive
commission and obtaining signatures on blank papers.
12] It is then vehemently contended that the Bank
avoided reconciling the accounts. The petitioners submitted that
the Bank has not properly maintained their accounts and
misappropriated the money of the petitioners. According to the
petitioners, after adjusting the amount of ₹7,00,000/- due and
payable to the Bank, it is the Bank which has to pay the balance
amount to the petitioners. In the affidavit filed on behalf of the
Bank by Mrs. Smita Sabnis before the DRT, details regarding the
adjustment of the FDR and the interest accrued thereon and paid
over to the petitioners are stated.
13] We have gone through the findings recorded by the
DRAT and DRT. So far as the present petition is concerned,
having gone through the concurrent findings of the Tribunal, we
do not find any reason to interfere with the findings recorded by
the Tribunals as the orders are passed on the basis of
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appreciation of the materials on record. We do not find any
perversity in the findings so recorded.
14] The writ petition is devoid of any merits and is,
therefore, dismissed with no order as to costs.
(M.S. KARNIK, J.) (CHIEF JUSTICE)
*sandesh
